PROJECT SUMMARY/ABSTRACT Blockade of co-inhibitory ?checkpoint? molecules, PD-1 and CTLA-4, has induced impressive clinical responses in advanced tumors; yet only in a subset of patients. Limited success with checkpoint blockade therapy suggests other cell extrinsic or intrinsic mechanisms may be dampening an effective immune response. Cytotoxic CD8+ T cells (CTL) encountering chronic antigen and environmental stressors (e.g. hypoxia, nutrient deprivation) can be driven to a terminally differentiated state marked by hyporesponsiveness and epigenetic, transcriptional, and metabolic dysfunction; a cell fate known as ?exhaustion?. However, it remains unclear whether terminally exhausted CTL (Texh) are simply non-functional or instead possess tolerogenic or suppressive properties. Our lab has conducted transcriptional profiling of tumor-infiltrating CD8+PD-1int (progenitor exhausted) CTL versus CD8+PD-1hiTim-3+ Texh, revealing that exhausted cells express a pattern of genes associated with immune regulation. Among these is the ectonucleosidase, CD39, responsible for hydrolyzation of extracellular ATP (eATP) to AMP. eATP is released upon T cell activation or cell death and induces proinflammatory cascades in numerous cell types. Because depletion of eATP can limit T cell activation, CD39 expression on Texh is likely to directly influence effector functions and tolerance in the tumor microenvironment. Indeed, when sorted directly from tumor, Texh, but not progenitor exhausted CTL, induce marked suppression of T cell effector responses. Strong preliminary in vitro data has revealed a HIF1a-dependent mechanism for CD39 expression in CTL. In cancer patients, disruption of tumor hypoxia through metformin treatment or VEGFR inhibition improves response to immunotherapy. Thus, we hypothesize that tumor hypoxia-driven CD39 expression on Texh represents a major barrier to the anti-tumor immune response. Our data support a model that as CTL progress to terminal exhaustion, hypoxic exposure upregulates CD39, providing Texh a mechanism to suppress proinflammatory processes. These findings suggest that Texh are deleterious to anti-tumor immunity and may need to be drastically reprogrammed or deleted in order to alleviate the immunosuppressive tumor microenvironment.